Six years ago, after closing on a second home in California’s idyllic Lake Tahoe area, former Zillow exec Austin Allison and his wife Angela took a moment to relish achieving their longtime dream of owning a vacation home. While sipping wine in front of the fireplace, Allison realized that while millions of other people share his dream, many also experience significant barriers to buying luxury single-family homes in top second home destinations, whether it’s the exorbitant costs, inevitable maintenance hassles or even the perceived guilt of being unable to use the home very often. And that’s when the wheels started turning.
Coupled with the fact that the country is experiencing one of the most intense sellers’ markets ever seen — with inventory at an all-time low and demand skyrocketing, particularly in second home markets and vacation towns — along with the trend of more folks taking advantage of remote work from places of refuge due to COVID, Allison knew he needed to come up with a way to make second homeownership available to more than just the 1 percent.
Together with Spencer Rascoff, cofounder and former CEO of Zillow, Allison launched Pacaso. The name? It’s a nod to revolutionary artist Pablo Picasso, in particular his work in cubism, which is about bringing together individual elements to create a more beautiful collective whole, says Allison, who serves as CEO and cofounder of the California-based company.
“We have created this new category of democratizing second home ownership,” he adds. “Three of four Americans with a household income over $150,000 aspire to own a second home, but few realize that dream. The largest barriers are purchase price and justification — it’s hard to rationalize buying a whole home you’ll use less than six weeks a year, or taking on the part time job of managing your home as a short-term rental. Pacaso’s business model addresses both challenges head on.”
Today, Pacaso is armed with a crew of 50-plus employees across more than a dozen markets throughout the U.S. — including Napa, Lake Tahoe, Palm Springs, Los Angeles and Park City, Utah, Colorado and Arizona — and plans to deepen its footprint in top second home destinations in California, while also expanding to new markets in the Central and East Coast by year end. The way it works: You let them know where you want a second home, how much you want to spend and how often you plan to use it. Pacaso then works with a local realtor to find you the ideal spot, while also locating and vetting co-owners. As a result, the company is able to offer true home ownership to each co-owner.
“Once you own the home, we take care of everything as the LLC program manager,” says Allison. “From interior design and scheduling, to finding and managing a local property management company. All you do is enjoy your home.”
This is the second startup for Allison, who began selling real estate at age 18, and has worked in residential and commercial real estate for a decade. In 2009, he formed dotloop, a company that created software to manage real estate transactions, in his hometown of Cincinnati. Zillow acquired dotloop in 2015, though Allison continued to run dotloop as a Zillow executive until 2018.
Although the founders declined to comment on how much the company has invested in properties to date, the startup — still just months old — has already secured $75 million in growth round funding and $1 billion in debt financing. Pacaso is the fastest U.S. company to reach “unicorn” status, meaning it’s valued at $1 billion and has achieved profitability.